What does Politically Exposed Person (PEP) mean?

What does Politically Exposed Person (PEP) mean?

PEP stands for "Politically Exposed Person." This term describes individuals who, due to their public functions, have a higher risk of potential involvement in corruption and money laundering. Typically, this includes: - Heads of state, government officials, judges of the highest court, high-ranking military personnel, leading party members, key executives of state-owned enterprises, as well as family members and close associates of the aforementioned groups.

Financial institutions and other obligated entities under anti-money laundering laws are required to identify their customers and determine if they are PEPs. If a customer is identified as a PEP, stricter due diligence and monitoring measures are required to manage the increased risk.
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